Tuesday, November 20, 2012

20121120 1807 FCPO EOD Daily Chart Study.

FCPO closed : 2457, changed : -2 points, volume : lower.
Bollinger band reading : pullback correction little downside biased.
MACD Histogram : rising higher, buyer testing market.
Support : 2450, 2400, 2350, 2300, 2250 level.
Resistance : 2490, 2520, 2550, 2570 level.
Comment :
FCPO closed fell marginally with reduced volume exchanged. Soy oil price currently trading slightly lower after overnight soar more than 1.5% while crude oil price pullback lower after yesterday surged.
Slower exports figure released by ITS cargo surveyor today dragged CPO price trading lower.
Daily chart reading continue calling a pullback correction little downside biased market development testing resistance near middle Bollinger band level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20121120 1742 FKLI EOD Daily Chart Study.

FKLI closed : 1617 changed : +0.5 point, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : recovering, seller taking partial profit.
Support :  1615, 1600, 1595, 1590 level.
Resistance : 1623, 1627, 1635, 1640 level.
Comment :
FKLI closed 1 tick higher with slower volume traded doing 7 points discount compare to cash market that closed marginally higher. Overnight U.S markets closed positively and today Asia markets ended mixed while European markets currently having downward correction.
Uncertainty over Europe development on 15 billion-euro ($19.2 billion) gap in Greece’s public accounts discussion, France credit rating downgrade by Moody's overshadows yessterday better than expected U.S. home sales and U.S. budget discussion optimism development resulted some countries exchanged traded lower.
Daily chart wise, technical study revised to calling a pullback correction downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20121120 1657 Global Markets & Commodities Related News.

STOCKS: European stock index futures pointed to slightly lower open, pausing after the biggest daily gain in 10 weeks, with a downgrade of France's credit rating capping sentiment. Asian shares rose tracking U.S. stocks which bounced higher for a second consecutive session on Monday as investors were encouraged by the early atmosphere surrounding talks to tackle the nation's fiscal crunch. (Reuters)

FOREX-Yen dangles near 7-month low vs dollar, seen vulnerable
SINGAPORE, Nov 20 (Reuters) - The yen hovered near a seven-month low against the dollar and was likely to stay under pressure in the near term, dealers said, amid mounting political calls for more aggressive monetary expansion.
"I think we are going to see new highs," said Todd Elmer, currency strategist at Citi in Singapore, referring to the dollar's outlook versus the yen. "We are going to break out of the topside of the range around 82. The risk is that we could extend a little beyond that point."

Moody's strips France of AAA-rating with one-notch cut
PARIS/NEW YORK, Nov 19 (Reuters) - Moody's stripped France of its prized triple-A badge on Monday, cutting the sovereign credit rating on Europe's No. 2 economy by one notch to Aa1 from Aaa, citing an uncertain fiscal outlook and deteriorating economy.
The downgrade, which follows a cut by Standard & Poor's in January, was widely expected but is still a blow to Socialist President Francois Hollande as he strives to convince the world he can fix France's public finances and stalled economy.

Euro zone to move on unfreezing Greek aid on Tuesday (Reuters)
Euro zone finance ministers will give a tentative go-ahead for the disbursement of 44 billion euros in emergency loans to Greece on Tuesday, but the money will only be paid on Dec. 5 if the country meets all remaining conditions.

GRAINS: Chicago wheat rose for a second straight session, lifted by renewed concerns over global supplies as U.S. crop ratings dropped to a record low for the month of November following dry weather. Soybeans eased after closing higher on Monday on expectations of a rebound in Chinese demand, while corn was little changed, holding on to last session's 1.6 percent climb amid tight supplies. (Reuters)

U.S. wheat crop ratings fall more than expected (Reuters)
The U.S. Agriculture Department said on Monday its rating of the winter wheat crop fell to 34 percent good to excellent, below analysts' expectations, due to persistent dry conditions in the U.S. Plains.

IEA says world oil markets remain well supplied (Reuters)
World oil markets are well supplied despite the loss of nearly 1 million barrels a day of crude from Iran following sanctions by the United States and European Union, the head of the International Energy Agency (IEA) told Reuters on Monday.

OIL: Brent crude held steady above $111 a barrel, less than a dollar off a one-month top hit in the previous session, on hopes a U.S. budget crisis will be averted and on supply worries triggered by tension in the Middle East. (Reuters)

China considers tax cut for iron ore miners -paper (Reuters)
China is considering cutting taxes for domestic iron ore miners, state media reported, as mining firms in the world's top consumer of the ore struggle to compete with overseas rivals.

China considers tax cut for iron ore miners -paper
SHANGHAI, Nov 20 (Reuters) - China is considering cutting taxes for domestic iron ore miners, state media reported on Tuesday, as mining firms in the world's top consumer of the ore struggle to compete with overseas rivals.
The country's Ministry of Industry and Information Technology (MIIT) will work with the finance ministry and other parties on a proposal to cut the current total tax rate of around 25 percent by up to half, the China Securities Journal reported, without citing sources.

China daily crude steel output rises 1.6 pct in early Nov -industry data
SHANGHAI, Nov 20 (Reuters) - China's average daily crude steel output rose 1.6 percent to 1.957 million tonnes for the first ten days of November from the preceding period, industry data showed on Tuesday, as large mills lifted output on a recent rally in steel prices.
Large steelmakers in the world's top steel producer boosted output in the period to 1.638 million tonnes per day, up by around 8 percent from Oct. 21-31, data from the China
Iron & Steel Association (CISA) seen by Reuters showed.

Japan crude steel output suffers biggest annual fall in 9 mths
TOKYO, Nov 19 (Reuters) - Japan's crude steel output registered its biggest annual fall in nine months in October, as a decline in domestic car production and an increase in imports of construction steel reduced demand.
Output fell 6.7 percent from a year earlier to 8.84 million tonnes, the Japan Iron and Steel Federation said on Monday.

METALS-Copper eases from 2-week high, Greece aid supports
SINGAPORE, Nov 20 (Reuters) - London copper edged back from two-week highs hit the  previous session when the  U.S. housing market showed unexpected vitality, while Greece was set to receive another round of aid, boosting risk appetite and  soothing worries over metals demand.
"We had a bit more positive news coming out of Europe, but  you really want to see whether that optimism can be sustained,"  said Jonathan Barratt, chief executive of Barratt's Bulletin, a  Sydney-based commodity research firm.

PRECIOUS-Gold steady on Mideast tension, hopes for US fiscal talks
SINGAPORE, Nov 20 (Reuters) - Gold traded steady  following its biggest one-day rise in two weeks, supported by  hopes of a U.S. solution to its fiscal problems and Middle East  tension, but weighed down by a firmer dollar as a result of  France's rating downgrade.
"People are feeling a bit at ease about the budget talks in  Congress," said Yuichi Ikemizu, head of Japan commodity trading  at Standard Bank.

BASE METALS: London copper edged back from two-week highs hit the  previous session when the U.S. housing market showed unexpected vitality, while Greece was set to receive another round of aid, boosting risk appetite and soothing worries over metals demand. (Reuters)

PRECIOUS METALS: Gold traded steady following its biggest one-day rise in two weeks, supported by hopes of a U.S. solution to its fiscal problems and Middle East tension, but weighed down by a firmer dollar as a result of France's rating downgrade. (Reuters)

20121120 1520 Palm Oil Related News.

VEGOILS-Palm oil slips off 2-week high on slowing exports
Tue Nov 20, 2012 12:50am EST
* Malaysia Nov. 1-20 exports down 3.3 pct m/m -ITS
    * Olam shares halted, media reports say Muddy Waters
questions accounting
    * Olam rejects Muddy Waters accounting claims
    * Palm oil's target of 2,588 ringgit aborted -technicals

 (Updates prices, adds detail)
    By Chew Yee Kiat
    SINGAPORE, Nov 20 (Reuters) - Malaysian palm oil futures
edged lower on Tuesday, as investors booked profits after the
contract hit a two-week high earlier in the day and as export
demand continued to show signs of slowing.    
    The world's No.2 palm producer exported 1.02 million tonnes
of palm products for Nov. 1-20, down 3.3 percent from 1.06
million tonnes a month ago, cargo surveyor Intertek Testing
Services said on Tuesday.
    Market players were hoping for higher exports to ease record
stocks, which hit 2.51 million tonnes in October. Another cargo
surveyor Societe Generale de Surveillance will release its
export data later in the day.
    "Traders were pretty hopeful for positive export data,
although this decline is not really that significant," said Ker
Chung Yang, investment analyst at Phillip Futures in Singapore.
    "Market participants are also anxious as they wait for the
outcome of the European financial meeting," he added, referring
to a gathering later on Tuesday where euro zone finance
ministers are expected to give a tentative go-ahead for the
disbursement of 44 billion euros in emergency loans to
    By the midday break, the benchmark February contract
 on the Bursa Malaysia Derivatives Exchange had lost 0.3
percent to 2,452 ringgit ($801) per tonne. Prices earlier
touched 2,485 ringgit, the highest since Nov. 2.
    Total traded volumes stood at 15,015 lots of 25 tonnes each,
higher than the usual 12,500 lots.  
    Technicals showed a bullish palm oil target of 2,588 ringgit
had been aborted, said Reuters market analyst Wang Tao.

    Singapore commodities firm Olam International Ltd
asked for its shares to be halted from trading on Tuesday, after
media reports quoted short-seller Muddy Waters' Carson Block as
saying he was betting against the company after questioning its
accounting practices.
    The company defended itself against Muddy Waters, saying the
short-seller had made "baseless and unsubstantiated assertions".
    In related markets, Brent crude held steady above $111 a
barrel on Tuesday, less than a dollar off a one-month top hit in
the previous session, on hopes a U.S. budget crisis will be
averted and on supply worries triggered by tension in the Middle
    In other vegetable oil markets, U.S. soyoil for December
delivery edged 0.2 percent lower in early Asian trade.
The most active May 2013 soybean oil contract on the
Dalian Commodity Exchange had gained 0.3 percent by the midday

20121120 1111 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares rise on hopes for US fiscal deal
TOKYO, Nov 20 (Reuters) - Asian shares rose on hopes of a compromise in the U.S. fiscal crisis, while the euro fell after Moody's Investors Service scrapped France's top-notch credit rating, reminding investors of the protracted euro zone debt crisis.
"Moody's news is certainly not positive but market reaction seems contained," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, adding that trading was getting lighter ahead of the U.S. Thanksgiving holiday weekend.

FOREX-Euro nears 2-week high on Greece, U.S. budget optimism
NEW YORK, Nov 19 (Reuters) - The euro rose to a near two-week high against the U.S. dollar on Monday, buoyed by appetite for risk on optimism that Greece will receive more funding and signs of progress on resolving a looming U.S. fiscal crisis.
"For the euro/dollar to see an extended run ... a serious improvement in risk appetite is needed, with a Spanish bailout or an exceptionally quick compromise to the U.S. fiscal slope necessary as the proper catalyst," said Christopher Vecchio, currency analyst at DailyFX in New York.

OIL - Oil rises 2.5 pct on Mideast tensions, US optimism
NEW YORK, Nov 19 (Reuters) - Oil rose 2.5 percent on Monday to its highest price since mid-October, fueled by supply concerns as violence in the Middle East escalated and as investors grew more hopeful that a U.S. budget crisis will be averted.
"There's no oil being lost, obviously. But it's just the follow-on effect. No one likes confrontation anywhere near the Gulf region," said Rob Montefusco, oil broker at Sucden Financial in London.

Total sells $2.5 bln Nigeria oil field stake to Sinopec
PARIS, Nov 19 (Reuters) - Total  is selling a 20 percent stake in a Nigerian offshore oil field to China's Sinopec  in a $2.5 billion deal which will help the French oil group fund its ambitious exploration plans.
Total said on Monday it had signed a deal to sell the stake in the OML 138 block, which currently produces 130,000 barrels per day of oil equivalent and contains the Usan field, which started production in February.

Predicted US oil glut a boon to those who move it
Nov 18 (Reuters) - Railroads, pipeline companies and refiners stand to do especially well from a U.S. drilling bonanza that is upending the energy trade balance for the world's largest economy.
An anticipated surge in U.S. oil output to the highest levels in the world would give a boost to those who move crude to where it can be turned into finished products and even shipped abroad.

POLL-US crude, gasoline inventories seen higher, distillates off
Nov 19 (Reuters) - U.S. crude oil and gasoline inventories were forecast to have risen last week while distillate stockpiles were seen falling, a preliminary Reuters poll of four analysts showed on Monday.
Inventory changes were seen more broadly in line with seasonal trends, after Hurricane Sandy caused massive disruptions to the East Coast fuel distribution network earlier this month, causing product inventories in the region to be drawn down to help meet demand.

IEA says world oil markets remain well supplied
CANBERRA/SYDNEY, Nov 19 (Reuters) - World oil markets are well supplied despite the loss of nearly 1 million barrels a day of crude from Iran following sanctions by the United States and European Union, the head of the International Energy Agency (IEA) told Reuters on Monday.
Brent crude has stayed above $100 a barrel for most of this year due to concerns over supply disruptions after the United States and Europe slapped sanctions on Iran in a bid to force  Tehran to abandon its controversial nuclear programme.

Sudan denies delaying south's oil exports
KHARTOUM/JUBA, Nov 19 (Reuters) - Sudan and South Sudan have not yet agreed on how to demilitarise their border - a condition for resuming oil flows, Khartoum said on Monday, but denied it was deliberately delaying the economically vital trade.
Newspaper reports about a possible oil export delay knocked the Sudanese pound to a historic low against the dollar, illustrating the importance for both countries of getting oil from landlocked South Sudan's fields via the north for export.

Nigeria Exxon spill spreads for miles along coast
IBENO, Nigeria, Nov 17 (Reuters) - An oil spill at an ExxonMobil  facility offshore from the Niger Delta has spread at least 20 miles from its source, coating waters used by fishermen in a film of sludge.
A Reuters reporter visiting several parts of Akwa Ibom state saw a rainbow-tinted oil slick stretching for 20 miles (32 km) from a pipeline that Exxon had shut down because of a leak a week ago. Locals scooped it into jerry cans.

Saudi summer oil burning hits record high in 2012 -JODI
DUBAI, Nov 19 (Reuters) - Saudi Arabia burned record volumes of crude oil over the summer, official government figures show, contrary to its aim of using  more gas for power generatation to reduce wastage of crude that it could export.
During the peak period from early June through September, Saudi Arabia burned an average of 763,250 barrels per day (bpd) of crude, compared to an average of 701,250 bpd last year and 747,750 bpd in the previous record summer of 2010, official government data issued on Sunday under the Joint Oil Data Initiative (JODI) shows.

Chevron delaying Richmond, Calif., refinery pipe repair
HOUSTON, Nov 19 (Reuters) - Chevron Corp  is delaying replacing fire-damaged pipe on the shut central crude distillation unit at its refinery in Richmond, California, until questions raised by investigators and regulators about the metallurgy of the replacement pipe are resolved, a refinery official said on Monday.
An Aug. 6 fire at the crude unit began with a leaking pipe thought to have suffered corrosion from sulfur under the high temperatures required to refine crude oil. The fire forced a shutdown of the crude unit and halved motor fuel production at the 245,000 barrel-per-day refinery in the San Francisco Bay area.

20121120 0942 Malaysia Corporate Related News.

Malaysia vehicle sales accelerate 20.7% to 55,358 in October
Vehicles sales in Malaysia rose to 55,358 units in October, up 20.7% or 9,486 units from a month ago and the Malaysian Automotive Association expects sales to be maintained in November. The association said on Monday the higher sales in October were due to the positive consumer sentiment, the introduction of new models and also a longer working month. Of the 55,358 units sold in October, it said passenger vehicles accounted for 478,515 units and commercial vehicles 6,943. The MAA said year-to-date, total vehicles sale rose 1.97% to 513,805 units from 503,859 units in the previous corresponding period. (StarBiz)

Golden-Agri issues RM1.5bn Islamic bond in Malaysia
Singapore-listed Golden Agri-Resources Ltd, the world's second largest palm oil plantation company, has issued its first Islamic bond, or sukuk, in Malaysia worth RM1.5bn (USD488m). "The company considers Malaysia the ideal location for the issue given the country's well-established and advanced sukuk market, which is abundant with liquidity, coupled with its familiarity with the palm oil industry," Golden Agri said. The Islamic medium-term notes, part of a RM5bn program established earlier this month, will have a tenure of five years and mature in Nov 2017. The notes were priced at 4.35%. (StarBiz)

IOI Corp Q1 earnings up 134% to RM604.3m, boost from forex gains
IOI Corporation's earnings jumped 134% to RM604.30m in its first quarter ended 30 Sept 2012 (Q1FY13) from RM258.1m a year ago, boosted mainly by foreign exchange gains while it expects a challenging year ahead. The plantation heavyweight reported on Monday its revenue fell 18.7% to RM3.4bn from RM4.1bn a year ago.
"The increase is due mainly to translation gain of RM259.2m (Q1 FY2012 - loss of RM271.7m) on foreign currency denominated borrowings and higher contributions from all major segments other than plantation segment," it said. (StarBiz)

Scomi tracking KL monorail system
SCOMI Engineering wants to take the government-owned Kuala Lumpur monorail system private and expand the services to Bandar Sunway, Selangor, in a deal that could be worth over RM3bn. The KL Monorail project was built at a cost of RM1.2bn by KL Infrastructure Group, which had a 40-year concession to collect fares. The system is now operated by Prasarana's wholly-owned unit, KL StarRail SB, and uses 12 two-car trains built by Scomi Rail, a subsidiary of Scomi Engineering. Scomi Engineering president Suhaimi Yaacob said the company has prepared two proposals - extending the line to Bandar Sunway and privatising the project. (BT)

Mitsubishi launches Mirage, plans Malaysia assembly plant
Mitsubishi Motors Malaysia SB (MMM) is planning to set up its first assembly plant here by the end of next year. Its chief executive officer Tetsuya Oda declined to reveal the cost of setting up the plant or its location. The company is now in discussions with the relevant parties on the extent of the production capacity, he told reporters at the launch of the Mitsubishi Mirage yesterday. The Mirage, the latest model by Mitsubishi Motors Corp (MMC), is powered by the new 3A92 1.2-litre three-cylinder engine with MIVEC (Mitsubishi Innovative Valve timing Electronic Control) system. (BT)

MMC: Our collaboration with Proton is over
Mitsubishi Motors Corp (MMC) of Japan says its collaboration with Proton Holdings is over. This follows a change in ownership of Proton to DRB-Hicom, which subsequently chose Honda as Proton's new foreign strategic partnership (FSP). This was confirmed by MMC vice-corporate GM for Asia and Asean Ryujiro Kobashi, who said there are no plans to extend the MoU with Proton. MMC and Proton signed a product development agreement in Dec 2008 to develop a new vehicle model for Proton. Both parties had agreed on the collaboration that would see Proton source a vehicle from Japan to replace the Waja. (Financial Daily)

Matang launches RTO for Scope
The MCA-controlled plantation firm, Matang Holdings, has launched a reverse take-over (RTO) of electronics firm Scope Industries in a deal worth RM145m. The same deal also saw ACE Market-listed Scope signing an agreement to buy out another plantation company Benua Mutiara SB, for RM31.7m. Both deals are to be satisfied via the issuance of new Scope shares at 25 sen each. The proposals, if approved, will change Scope's nature of operations from being a manufacturing company to a plantation outfit with a total landbank of 6.966 acres. (Financial Daily)

Dialog, Halliburton to jointly manage RM4b oilfield deal
Dialog and Halliburton International Inc signed an agreement yesterday to jointly manage the Bayan Field oilfield services contract (OSC) worth USD1.2bn (RM3.7bn) over 24 years. Under the terms of the agreement, Dialog D&P SB and Asia Energy Services SB, will hold a 50:50 interest in Halliburton Bayan Petroleum SB (HBP). HBP recently signed an agreement with Petronas Carigali SB to provide services to recover the reserves from the Bayan Field, which is located off the shores of Bintulu, Sarawak, estimated to have a total project value of USD 1.2bn over 24 years. ((Malaysian Reserve)

Astro management exercises 1m new shares
Astro Malaysia Holdings management has exercised one million new shares in the company for RM1 per share under a scheme to reward its top management and executives. The price is way below Astro's current market price that closed at RM2.70 yesterday and its initial public offering (IPO) price of RM3 per share. The issue is part of the 21.9m management share scheme which was announced on 11 Oct, after its IPO listing on 19 Oct. Astro's market capitalization after the scheme takes effect would be around RM14bn thus the management share scheme would have a minimal effect on the company's share price. (Malaysian Reserve)

20121120 0942 Global Economy Related News.

EU: Euro declines vs most peers after Moody’s cuts France rating
The euro slid vs most of its 16 major counterparts after Moody’s Investors Service lowered France’s government bond rating, renewing concern the currency bloc’s debt crisis is deepening. The euro weakened against the dollar and yen after Moody’s cut France by one grade to Aa1 and said its outlook remains negative, citing an uncertain fiscal outlook for Europe’s second-biggest economy. (Bloomberg)

EU: Europe chiefs face Greek aid gap in rescue brinkmanship with IMF
European finance ministers will try to plug a EUR15bn (USD19bn) hole in Greece’s finances and win over the International Monetary Fund in the latest instalment of three years of debt-crisis brinkmanship. Recycling European Central Bank profits on Greek bonds, charging Greece lower interest rates and extending repayment deadlines are among the options under consideration today for filling the new gap in Greece’s public accounts. (Bloomberg)

US: Sales of existing US homes increase unexpectedly
Sales of previously owned US homes unexpectedly climbed in October, showing record-low mortgage rates are helping spur the world’s largest economy. Purchases of existing houses increased 2.1% to a 4.79m annual rate, exceeding the median forecast of economists surveyed by Bloomberg, figures from the National Association of Realtors showed today in Washington. Property values rose over the past 12 months by the most in seven years as inventories dropped to the lowest level in almost a decade. (Bloomberg)

US: Homebuilder confidence rises to six-year high on US sales
Confidence among US homebuilders unexpectedly climbed in November to a six-year high, propelled by the biggest jump in sales in a decade, adding to signs the real-estate market is improving. The National Association of Home Builders/Wells Fargo index of builder confidence increased to 46, the highest level since May 2006, from 41 in October, figures from the Washington-based group showed. The median forecast in a Bloomberg survey of 49 economists called for no change. Readings below 50 mean more respondents said conditions were poor. (Bloomberg)

S&P 500 rises most in 2 months amid budget deal optimism
US stocks rose, giving the Standard & Poor’s 500 Index its biggest advance in two months, amid better-than-forecast housing data and as President Barack Obama expressed confidence on a budget agreement with Congress. The S&P 500 rose 2% to 1,386. The Dow Jones Industrial Average added 207.65pts, or 1.7%, to 12,795.96. Obama met with senior Democrats and Republicans on 16 Nov for talks to avoid USD607bn of automatic tax increases and spending cuts that. Sales of previously owned US homes climbed in October, indicating gains in the real estate market are being sustained by cheap borrowing costs. (Bloomberg)

20121120 0939 Global Markets Related News.

Asia FX By Cornelius Luca - Mon 19 Nov 2012 17:07:09 CT (Source: CME/www.lucafxta.com)
The appetite for risk improved significantly on Monday, as the markets were caught overly short by hopes that negotiations between President Barack Obama and congressional leaders to avoid a budget crisis will be successful. These hopes may be over optimistic, but this will be another story to tell. Most European and commodity currencies surged after most of them fell on Friday, while the yen remained weak after diving to a 6 ½-month low. The US stock indexes soared. Gold, oil and silver advanced as well. The short-term outlook for the European and commodity currencies is sideways to slightly bullish. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on most foreign currencies. Good luck!

US: The NAHB/Wells Fargo Housing Market Index rose to 46 in November from 41 in October.
US: Existing home sales rose 2.1% to a seasonally adjusted annual rate of 4.79 million in October from a downwardly revised 4.69 million in September. The median existing home price rose 0.2% to $178,600 in October and up 11.1% compared to a year ago.

Today's economic calendar
Australia: The Conference Board leading index for September
Australia: The RBA meeting's minutes
Japan: The BoJ interest rate decision
Japan: All Industry Activity Index for September

Asian Stocks Rise Third Day as U.S. Home Sales Advance (Bloomberg)
Asian stocks rose, with the regional benchmark index poised to advance for a third day, as better- than-forecast U.S. home sales boosted optimism in the world’s largest economy. LG Electronics Inc. (066570), a South Korean maker of consumer electronics that gets almost a third of its sales from North America, climbed 2 percent. Samsung Electronics Co., the world’s No. mobile phone maker, gained 1.2 percent in Seoul after a U.S. trade agency agreed to review its patent case versus Apple Inc. BHP Billiton Ltd., the world’s biggest mining company, added 1.1 percent in Sydney as metal prices advanced.
The MSCI Asia Pacific Index (MXAP) gained 0.1 percent to 121.21 as of 9:34 a.m. in Tokyo, with about two shares rising for each that fell. Markets in Hong Kong and China are yet to open. The measure extended its rally for a third day after President Barack Obama started talks with Republicans and Democrats on a U.S. budget agreement. Failure to strike a deal will trigger more than $600 billion in automatic tax increases and spending cuts that may throw the country into a recession. “Confidence is growing that a U.S. budget deal can be reached, as politicians from both parties continue to make some positive comments on working together to come up with a solution,” said Stan Shamu, a market strategist at IG Index, a Melbourne-based provider of trading services for equities, currencies and commodities. “Better-than-expected existing home sales data has also helped to lift sentiment.”

Japanese Stocks Gain on U.S. Housing Data, Stimulus Hopes (Bloomberg)
Japanese stocks rose, with the Topix Index heading for the biggest gain in a four-day period since March 2011, after U.S. home sales rose more than expected and amid speculation a party more supportive of stimulus may take power in next month’s election. Fuji Heavy Industries Ltd., the maker Subaru cars that gets almost half its sales from North America, gained 0.8 percent. Inpex Corp., Japan’s top oil explorer by market value, rose 0.6 percent after crude prices rose to a one-month high. Nikon Corp., a camera maker that gets about a quarter of its revenue from Europe, added 0.9 percent as the yen weakened against the euro after France lost its top credit rating. The Topix gained 0.2 percent to 763.40 as of 9:33 a.m. in Tokyo, with more than two shares advancing for each that fell. The Nikkei 225 Stock Average (NKY) added 0.1 percent to 9,157.48, with volume almost 20 percent above the 30-day average.
“Better-than-expected existing home sales data has helped to lift sentiment,” said Stan Shamu, a market strategist at IG Index, a Melbourne-based provider of trading services for equities, currencies and commodities. Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The S&P 500 gained 2 percent yesterday as sales of previously owned U.S. homes climbed in October and Obama expressed confidence on a budget agreement with Congress. Purchases of existing U.S. houses increased 2.1 percent to a 4.79 million annual rate, exceeding the median forecast of economists surveyed by Bloomberg, figures from the National Association of Realtors showed yesterday in Washington.

S&P 500 Rises Most in 2 Months Amid Budget Deal Optimism (Bloomberg)
U.S. stocks rose, giving the Standard & Poor’s 500 Index its biggest advance in two months, amid better-than-forecast housing data and as President Barack Obama expressed confidence on a budget agreement with Congress. Freeport-McMoRan Copper & Gold Inc. (FCX) and Newmont Mining Corp. (NEM) rallied more than 1.4 percent to pace gains in commodity producers amid Middle East tension. Cisco (CSCO) Systems Inc. increased 1.7 percent as it agreed to buy closely held Meraki Inc. for $1.2 billion. Lowe’s Cos. (L) surged 6.2 percent after the home- improvement retailer posted profit that beat estimates. Apple Inc. (AAPL) and Amazon.com Inc. (AMZN) added at least 1.9 percent.
The S&P 500 rose 2 percent to 1,386.89 at 4 p.m. in New York. The benchmark gauge for U.S. equities gained 2.5 percent in two days, the most since July. The Dow Jones Industrial Average added 207.65 points, or 1.7 percent, to 12,795.96. Volume for exchange-listed stocks in the U.S. was 6.2 billion shares, about in line with the three-month daily average. “This change and transition in taxation is much more important for equity allocations going forward than what people realize,” said Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $3.5 billion. He spoke in a phone interview. “The U.S. economy looks pretty good. Earnings are OK. As long as Congress doesn’t absolutely wreck it, it will be fine.”
Obama met with senior Democrats and Republicans on Nov. 16 for talks to avoid $607 billion of automatic tax increases and spending cuts that, if allowed to come into force, might push the country into a recession next year. The S&P 500 rose 0.5 percent on Nov. 16 as House Speaker John Boehner, a Republican, described the budget discussions as constructive and said he would accept increased government revenue coupled with spending cuts. Congress is now in recess for Thanksgiving until Nov. 26.

S&P 500 in Cheapest Bull Market Since Ronald Reagan (Bloomberg)
The post-election rout in U.S. stocks has driven the Standard & Poor’s 500 Index (SPX) down so far that it would have to advance 26 percent to reach the valuation of bull markets since John F. Kennedy was in the White House. Investors have seen $806 billion erased from the value of American equities since President Barack Obama was re-elected Nov. 6 in the biggest decline since May. The combination of falling stocks and rising profits as the economy recovers has left the S&P 500’s price-earnings ratio below the ending level of eight of the nine bull markets since 1962 and beneath the average of any since Ronald Reagan was in power.
Bears say the 4.8 percent drop in the S&P 500 and valuations show investors are losing confidence that Congress and Obama will reach a budget compromise that would keep the recovery from stalling. Bulls, including the top strategists at six Wall Street firms, say that the declines are another reason to buy and that stock prices from Apple Inc. (AAPL) to Dollar Tree (DLTR) Inc. are bound to improve as earnings increase. “The stock market looks cheap because people are way too pessimistic about what growth looks like for the next 10 years,” said Brian Jacobsen, who helps oversee $208 billion as chief strategist at Wells Fargo Advantage Funds and predicts the S&P 500 will rise 47 percent to 2,000 in 2014. “You can get big and rapid move

Recap Stock Index Market Report (CME)
The December S&P 500 trended higher throughout the US trading hours, helped by a rebound in sentiment, favorable earnings and better than expected housing data. More headlines indicating that US officials are willing to work together on the fiscal cliff, as well as confident words from President Obama overnight have done a lot to boost risk-taking sentiment. Earnings this morning from Lowe's and Tyson foods came in better than expected, helping boost those shares significantly higher during the session. US Existing Home Sales in October came in better than expected, which seemed to add further support to the morning gains. Upside leadership came from material and technology related shares. Some traders pointed to a nearly 7% gain in the shares of Apple as a key factor behind the NASDAQ's out performance.

European Stocks Advance Amid U.S. Budget Talks Optimism (Bloomberg)
European (SXXP) stocks climbed the most in more than two months as U.S. President Barack Obama expressed confidence that he will strike a deal with Congress on a new budget to avoid the so-called fiscal cliff. HSBC Holdings Plc (HSBA) added 3.8 percent after the bank said it has held talks to sell its $9 billion stake in Ping An Insurance (Group) Co. BP Plc (BP/) gained 3.6 percent following a report that the oil company plans a 3.7 billion-pound ($5.9 billion) buyback. ING Groep NV (INGA) advanced 3.7 percent after the European Commission granted it more time to sell its insurance operations in the region. The Stoxx Europe 600 Index rose 2.2 percent to 268.58 at the close, rebounding from its lowest level since Aug. 3, as the Republican U.S. House Speaker John Boehner said after the close of European trading last week that he has held constructive budget talks with Obama.
“This is good news and a relief,” said Bruno Ducros who helps oversee about $3.9 billion in equities at CamGestion in Paris. “The risk of a very strong slowdown in the U.S. had scared the market. It was a negotiation game before the election. Now, both sides are ready to agree.” The S&P 500 erased its decline on Nov. 16 after Boehner also said he would accept increased government revenue coupled with spending cuts. Speaking at a news conference in Bangkok, Obama said “I am confident we can get our fiscal situation dealt with.”

European Stocks May Drop After Breaching Draghi Level (Bloomberg)
European stocks will fall further after breaching a level that held since European Central Bank President Mario Draghi unveiled an unlimited bond-buying program, according to a technical analyst at Commerzbank AG. Draghi announced on Sept. 6 a plan to purchase debt in an attempt to regain control of interest rates in the euro area. The Stoxx Europe 600 Index closed at 265.49 on Sept. 5. The gauge slid below that level for the first time on Nov. 16. It had rallied as high as 276.18 on Oct. 18. “We fell below the September level, which in my point of view is a signal that the consolidation which began back in September is going to expand both in time and in space and the next really good support is in the area of the 200-day moving average, 260 to 261,” Petra Grafin Von Kerssenbrock, a technical analyst at Commerzbank, said in a telephone interview.
The Stoxx 600 has dropped 4.3 percent since the re-election of President Barack Obama on Nov. 6 as traders turned their focus to the so-called fiscal cliff that will trigger $607 billion of tax increases and spending cuts next year, sending the U.S. into recession, if Congress doesn’t reach a compromise. The index dropped 1 percent to 262.86 at the close of trading on Nov. 16, for a 2.7 percent weekly decline, the biggest since June. In technical analysis, investors and analysts study price graphs to predict changes in a security, commodity, currency or index.

U.K. Stocks Advance as U.S. Fiscal-Cliff Concern Eases (Bloomberg)
U.K. stocks advanced the most in more than five months on optimism the U.S. will avoid a fiscal deadlock after President Barack Obama said he is confident of winning Congress support for a deal. BP Plc advanced the most this month after a report that Europe’s second-largest oil company plans a share buyback. HSBC Holdings Plc (HSBA) gained 3.8 percent after saying it held talks to sell its stake in Ping An Insurance (Group) Co. The FTSE 100 Index climbed 132.07 points, or 2.4 percent, to 5,737.66 at the close in London, the biggest gain since June 6. The gauge has rallied 9.1 percent from this year’s low on June 1 as the European Central Bank announced an unlimited bond- buying plan and the Federal Reserve started a third round of quantitative easing. The broader FTSE All-Share Index rose 2.2 percent today, while Ireland’s ISEQ Index added 1.2 percent.
“A bounce in risk assets, following days of declines, is the first glimmer of life we’ve seen in equities for quite a few sessions,” said Simon Denham, managing director of Capital Spreads in London. “The promise from U.S. politicians that they will work through the Thanksgiving holidays to cut a deal seems to be giving bulls a reason to dip their toes back in.” Obama said at a press conference in Bangkok yesterday that he is “confident” of striking a deal with Congress to avoid the fiscal cliff, or $607 billion of automatic spending cuts and tax increases scheduled to occur at the start of 2013. He is on a three-nation tour in Asia.

Emerging Stocks Gain as Resource Rebound Boosts Bovespa (Bloomberg)
Emerging-market stocks posted their biggest gain in two months, led by resource shares, as oil and commodity prices gained on prospects the U.S. budget crisis will be resolved, bolstering the world’s largest economy. The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, rose 1.7 percent, the most since Sept. 13. Russia’s Micex and Brazil’s Bovespa advanced as oil surged. Turkish Airlines (THYAO) jumped the most in three years as earnings beat estimates and talks on cooperating with Deutsche Lufthansa AG progressed. Utility Centrais Eletricas Brasileiras SA (ELET6) fell the most in 15 years after Barclays Plc cut the stock to sell. Shandong Weigao Group Medical Polymer Co. led declines on the emerging markets gauge after third-quarter earnings missed analysts’ estimates.
The MSCI Emerging Markets Index (MXEF) added 0.8 percent to 977.98, the biggest gain since Sept. 14, snapping a seven-day losing streak. U.S. President Barack Obama started a new round of deficit-reduction talks with congressional leaders on Nov. 16 to avoid automatic tax increases and spending cuts that threaten to throw the country into a recession. Crude oil advanced to the highest level in a month amid concern that Middle East unrest will disrupt supply. “There’s now the emerging hope that a deal to address the U.S. budget deficit will be reached,” Aryam Vazquez, an economist at Wells Fargo & Co., said by phone from New York. “That’s the key catalyst behind this risk-on climate that we’re seeing, particularly in emerging-market assets. And oil is more a reflection of tensions in the Middle East.”
The S&P GSCI Spot Index rose 2.1 percent to the highest level in a month. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a measure of options prices on the fund and expectations of price swings, sank 12 percent, the most in almost a year.

Treasuries’ Foreign Buying Doubles China’s Sales (Bloomberg)
Even with all the concern about the so-called fiscal cliff, another confrontation over government borrowing limits and Chinese ownership of U.S. debt, foreign investors can’t get enough Treasuries. Brazil, Belgium, Luxembourg, Russia, Switzerland, Taiwan and Hong Kong boosted their holdings of U.S. government securities by a collective $264.8 billion since the last debt ceiling debate ended in August 2011, Treasury data released Nov. 16 show. The purchases more than made up for the $123 billion decline in Treasuries owned by China, America’s biggest overseas creditor, to $1.156 trillion. The rise in international ownership shows growing confidence in the U.S. while China’s reduced stake undermines Republican assertions that the nation has gained too much influence. President Barack Obama and Congressional leaders agreed Nov. 16 to begin talks on a long-term fiscal plan to avert more than $600 billion in mandated spending cuts and tax increases scheduled to big Jan. 1 that threaten the recovery.
“Despite our fiscal situation, despite all these issues, there hasn’t been much of a buyers’ strike from the Treasury’s perspective,” Aaron Kohli, an interest-rate strategist at BNP Paribas in New York, one of 21 primary dealers that trade with the Federal Reserve, said in a Nov. 13 telephone interview. “One has been replaced by the other and that really does demonstrate the depth of demand.”

GDP Accelerating to 2.9% Helping U.S. Overcome Sandy Woes (Bloomberg)
The U.S. economy looks set to weather the headwinds from Hurricane Sandy and the budget battles in Washington after picking up speed in the third quarter. Gross domestic product probably increased at about a 2.9 percent annual rate in July-September, according to economists from Goldman Sachs Group Inc. and Barclays Plc. That would be the fastest quarterly growth this year, beating the Commerce Department’s initial estimate of 2 percent. “The economy’s momentum has picked up a bit” as the fundamentals of the private sector “are improving,” said Jan Hatzius, chief economist at Goldman Sachs in New York. He projects third-quarter expansion will be revised up to 2.8 percent, and the fourth quarter may come in at 1.7 percent.
Help is coming from a housing recovery, strengthening job market and healthier household finances that are driving gains in consumer confidence and spending. While the damage from Sandy and an anticipated tightening of fiscal policy mean growth will decelerate this quarter and next, the world’s largest economy may emerge on stronger footing in the second half of 2013. The Bloomberg Economic Surprise Index, which compares 38 U.S. indicators with analysts’ forecasts, exceeded zero in mid- October for the first time since May and was 0.04 on Nov. 16, up from this year’s low of minus 0.4 on July 30. The projected upward revision to third-quarter GDP, due from the Commerce Department Nov. 29, will come largely from a narrower trade deficit and a bigger jump in stockpiles than initially estimated, economists said.

Sales of Existing U.S. Homes Rise Unexpectedly: Economy (Bloomberg)
Sales of previously owned U.S. homes unexpectedly climbed in October, showing record-low mortgage rates are helping spur the world’s largest economy. Purchases of existing houses increased 2.1 percent to a 4.79 million annual rate, exceeding the median forecast of economists surveyed by Bloomberg, figures from the National Association of Realtors showed today in Washington. Property values rose over the past 12 months by the most in seven years as inventories dropped to the lowest level in almost a decade. Gains in home prices are boosting consumer finances and sentiment, which in turn are underpinning the household spending that accounts for about 70 percent of the economy. Companies such as Lowe’s Cos. (LOW) are among those saying the outlook is improving as the market recovers from its worst slump since the Great Depression and foreclosures are whittled down.
“Housing’s cheap, borrowing is cheap and, if you can get credit, it’s a great time to buy,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, who projected a 4.8 million annual rate for October sales. “We’re fighting our way through distressed-property sales.” Another report today showed homebuilder confidence climbed in November to a six-year high, propelled by the biggest jump in sales in a decade. The National Association of Home Builders/Wells Fargo sentiment gauge increased to 46, the highest level since May 2006, from 41 in October, according to the Washington-based group.

BOJ in the Balance as Next Government Picks Top Posts: Economy (Bloomberg)
The government taking office after Japan’s Dec. 16 election will pick the central bank’s top three jobs, a chance to reshape policy in the third-largest economy that the opposition aims to seize for unlimited stimulus. BOJ Governor Masaaki Shirakawa, under fire from politicians for his perceived failure to reverse more than a decade of deflation, will end a five-year term on April 8. His deputies, Hirohide Yamaguchi and Kiyohiko Nishimura, will exit in March. Opposition leader Shinzo Abe, favored in polls to win next month’s vote, helped drive the yen to yesterday’s seven-month low by calling for unlimited easing and restrictions on central bank independence. An economy at risk of a second straight contraction this quarter may encourage an Abe-led government to install a pro-easing majority at the BOJ, with two former private-sector economists on the nine-member board already showing signs of favoring more stimulus.
“It looks like we’ll have a clear five majority votes for more BOJ action and that’s a change we haven’t seen in years,” said Kazuhiko Ogata, chief economist at Credit Agricole SA. (ACA) “BOJ policy will become more Bernanke-like in that it will be more aggressive and less focused on side-effects.” The yen was at 81.37 per dollar at 9:12 a.m. in Tokyo after touching 81.59 yesterday, its lowest since April 25. The Topix Index of stocks was up 0.3 percent, set for its fourth day of gains as Abe’s comments fuel speculation on the prospects of more easing.

Inaba Says BOJ Could Ease More If Government Reins in Debt (Bloomberg)
The Bank of Japan (8301) could buy bonds more aggressively if the government commits to lowering the world’s largest public debt, said Nobuo Inaba, a former central bank official and a possible candidate to replace Governor Masaaki Shirakawa in April. “The bank is concerned that continued massive bond purchases will lead to a worsening of the nation’s fiscal position,” Inaba said in an interview with Bloomberg on Nov. 16. “The bank could strengthen its easing and increase the impact of its policies” if the government commits to achieving fiscal health. The yen weakened to a near seven-month low today as markets expect mounting political pressure on the BOJ to lead to further monetary stimulus. The opposition Liberal Democratic Party, leading in polls to win an election next month, has called for “unlimited” easing to end deflation and revive an economy that shrank last quarter at the fastest pace since 2011’s earthquake.
Inaba, who was the BOJ’s executive director, said that the bank’s Oct. 30 joint statement with the government on ending deflation, the first of its kind, was “meaningless” without a firm government pledge to lower the nation’s debt, which stands at 237 percent of gross domestic product, according to the International Monetary Fund. “The government should make a legal promise to maintain fiscal consolidation in the midterm,” said Inaba, 62, who is currently head of the Ricoh Institute of Sustainability and Business, a think tank.

India Investment Opening at Stake as Singh Confronts Ex-Allies (Bloomberg)
Indian Prime Minister Manmohan Singh faces an opposition onslaught when parliament resumes this week, with rivals vowing to block the biggest opening to foreign investment in 10 years as the government bids to stoke growth. The Trinamool Congress party, a former Singh ally, said it will push for a vote of no confidence in the government when parliament meets Nov. 22 over its move to allow foreign supermarket chains to hold a majority stake in retail outlets. The main opposition Bharatiya Janata Party is planning a nationwide protest tomorrow, targeting Singh’s administration over rising prices, graft and the retail plan.
Singh’s Congress party needs to rally its 10-member ruling coalition and win support from parties outside of the minority government to push through steps that will also enable foreign companies to hold bigger stakes in insurance firms and invest in the pension sector. Failure to win lawmakers’ support could extend 24 months of policy paralysis that have contributed to growth slowing to near a three-year low and threaten to undermine the government ahead of elections due by May 2014. “If these important bills get through, the market will cheer as they have been waiting for this for a long time,” said Mumbai-based U.R. Bhat, managing director of Dalton Capital Advisors India, a unit of Dalton Strategic Partnership LLP in London which manages $2 billion in assets globally. “If they don’t, the government’s credibility will be lost. They will be perceived as a lame duck.”

Europe Leaders Face Greek Aid Gap in Brinkmanship With IMF (Bloomberg)
European finance ministers will try to plug a 15 billion-euro ($19 billion) hole in Greece’s finances and win over the International Monetary Fund in the latest installment of three years of debt-crisis brinkmanship. Recycling European Central Bank profits on Greek bonds, charging Greece lower interest rates and extending repayment deadlines are among the options under consideration today for filling the new gap in Greece’s public accounts. European governments tore open the hole last week, by giving Greece two extra years to cut its budget deficit. The required extra financing provoked a clash with the IMF, since it would add to Greece’s debt load instead of reducing it. “Greece is in a mess,” James Mirrlees, a Nobel economics laureate, told Bloomberg Television yesterday. Europe won’t solve the problem by “fiddling around with little bits of extra bailout and allowing them to go a bit slower.”
Officials said today’s meeting, starting at 5 p.m. in Brussels, won’t make a final decision to release the next tranche of aid to Greece, partly because parliaments in Germany, the Netherlands and Finland have yet to weigh in. The “troika” representing creditors also has to certify that Greek Prime Minister Antonis Samaras’s coalition government has delivered economy-boosting steps ranging from improvements to tax collection to the deregulation of closed professions. The meeting comes a day after France lost its top credit rating with Moody’s Investors Service, increasing pressure on President Francois Hollande to find ways to bolster growth in Europe’s second-largest economy.

Euro Finance Officials Meet to Jump-Start Greece Accord (Bloomberg)
European finance officials met in Paris today to forge a common position on Greece’s next aid payment as a sputtering economy and a spat with the International Monetary Fund cloud efforts to resolve the crisis. Finance officials from France, Germany, Italy and Spain convened a day before a meeting of the 17 euro nations in Brussels, according to a European Union aide. EU Economic and Monetary Affairs Commissioner Olli Rehn also attended. Lengthening maturities on Greek debt and lowering rates on the country’s bailout loans are the main options being discussed to plug a funding gap, said the official, who declined to be named because the talks aren’t public. The discussions on Greece are “likely to be tense as all players set out their positions,” Thomas Costerg, an economist at Standard Chartered in London, said in an e-mail. “Greece’s debt can is likely to be kicked further down the road, but we could see some constructive statements.”
The Brussels gathering, the second in a week after finance chiefs agreed seven days ago to keep Greece’s bailout aid flowing, underscores skirmishing among EU officials confronting rising unemployment and a slowing economy. In addition to a tussle between the EU and IMF over extending Greece’s debt target, the ministers are struggling to re-engineer the bailout without putting up more money.

France Loses Top Rating at Moody’s in Blow to Hollande (Bloomberg)
France lost its top credit rating at Moody’s Investors Service, which also maintained a negative outlook for Europe’s second-largest economy, citing what it called a worsening growth outlook. France was cut to Aa1 from Aaa, the rating company said yesterday. The Moody’s downgrade follows one by Standard & Poor’s in January and increases pressure on President Francois Hollande to find ways to bolster growth. “France’s fiscal outlook is uncertain as a result of its deteriorating economic prospects, both in the short term due to subdued domestic and external demand” and “structural rigidities” in the longer term, Moody’s said in a statement in Frankfurt.
Since taking office in May, Hollande has pressed Germany to do more to end the European debt crisis, while focusing on tax increases at home to pare France’s budget shortfall. Last month, his government has set out 20 billion euros ($25.5 billion) in new levies on the rich and big companies that are intended to reduce the deficit to 3 percent of gross domestic product next year. The euro slid versus most of its 16 major counterparts after the move by Moody’s renewed concern the debt crisis is deepening. The euro dropped 0.3 percent to $1.2773 as of 8:32 a.m. in Tokyo.

20121120 0939 Global Commodities Related News.

Hedge Funds Cut Bets in Longest Retreat Since 2008: Commodities (Bloomberg)
Hedge funds cut bullish commodity bets for a sixth straight week, the longest slump since the depths of the global recession four years ago, on mounting concern that economies are slowing. Money managers lowered combined net-long positions across 18 U.S. futures and options by 17 percent to 772,512 contracts in the week ended Nov. 13, Commodity Futures Trading Commission data show. Holdings have tumbled 38 percent since Oct. 2 in the longest retreat since August 2008. Investors turned bearish on copper for the first time since August. Commodities are little changed this year as weaker growth and more supply will mean surpluses in sugar, aluminum and zinc, according to Morgan Stanley. U.S. industrial production unexpectedly declined in October, while applications for jobless benefits rose to the highest since April 2011, separate reports showed last week. The 17-nation euro-area’s economy tumbled back into recession last quarter for the second time in four years, official figures showed Nov. 15.
“I am not bullish on commodities,” said Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages about C$100 billion ($97 billion) of assets. “I don’t think we are going to see improvement in the world economy for some time as there are too many problems.”

Commodities Climb to 4-Week High on U.S. Budget Optimism (Bloomberg)
Commodities rose to a four-week high on optimism that a deal will be reached to avoid automatic U.S. spending cuts and tax increases, boosting the outlook for economic growth and demand for metals, energy and grains. The Standard & Poor’s GSCI Spot Index of 24 raw materials rose as much 2.3 percent to 651.75, the highest since Oct. 22. Gains were led by sugar, which jumped the most since June. Oil reached the highest in four weeks amid concern that unrest in the Middle East will disrupt supplies. Copper climbed the most in nine weeks. Commodities erased their 2012 loss after President Barack Obama said yesterday he’s “confident” about reaching an budget agreement with lawmakers to avoid the $607 so-called fiscal cliff. A group of European finance officials met in Paris today to try to forge a common position on Greece’s next aid payment. Sales of previously owned U.S. homes climbed in October, a private report showed.
“Investors are saying here that the politicians are taking steps in the right direction to find some resolution,” Greyson Colvin, the managing partner at New York-based Colvin & Co., which manages $22 million of assets said in a telephone interview. “Bullish home data is also giving us some hope that 2013 may be a better year.”

DTN Closing Grain Comments 11/19 14:29 (CME)
Grains Close Higher Monday
Grains traded higher throughout the day, closing on a modest run with both corn and soybeans showing double-digit gains. Wheat contracts were sluggish as both Kansas City and Minneapolis finished near unchanged.

Wheat Market Recap Report (CME)
December Wheat finished up 3 3/4 at 841 3/4, 6 1/4 off the high and 6 1/4 up from the low. March Wheat closed up 4 at 857 3/4. This was 6 1/4 up from the low and 5 3/4 off the high. December Chicago wheat finished the day slightly higher but gained on KC and Minneapolis throughout the session. Strength was linked to a significant rally in the corn and soybean market to start the week. The US Dollar traded sharply lower and US stocks soared, both of which helped support the broader commodity complex. Export data continues to be a drag on wheat futures in the short term and export inspections for the week ending November 15th were disappointing with only 11.10 million bushels reported, but this was against 10.46 the week prior. Inspections needed each week to reach this crop years USDA estimate are at 26.93 million bushels which is about 540 million bushels more than last week's needed shipment pace. The current crop year's cumulative inspection pace is 36.5% of the USDA estimate vs. the 5 year average of 48.6%. Most traders view the long term export outlook at supportive but sales and shipments are struggling in the short term as cargos continue to be sold out of the Black Sea. Below average crop condition ratings for US winter wheat are also adding to the positive tone of the market. December Oats closed up 11 at 375 1/2. This was 10 up from the low and 2 1/2 off the high.

Corn Market Recap for 11/19/2012 (CME)
December Corn finished up 11 3/4 at 738 3/4, 2 1/2 off the high and 12 1/2 up from the low. March Corn closed up 11 1/2 at 742 1/2. This was 12 1/2 up from the low and 2 1/4 off the high. December corn traded sharply higher on the day on outside market support and as traders believe new export business is just around the corner. Additional strength was linked to a lower US Dollar and a stronger crude oil market due to conflict in the Middle East. Traders suggest the US will become a major player in world trade soon but no clear evidence of this has been seen just yet. Traders believe Japan, Indonesia, Malaysia, and the Philippians could become buyers of US corn soon as old crop, South American supplies dry up and due to corn's significant discount to wheat. Additional support is linked to a wetter long term forecast for Argentina which could delay planting. Export inspections for the week ending November 15th were reported at 14.35 million bushels vs. 9.46 the week prior. The sluggish pace favors the bear camp in the short term. Shipments needed each week to reach the current crop years USDA export estimate is 26.97 million bushels which is 300 million more bushels than the week prior. The cumulative inspection pace is 14% of this crop years USDA estimate vs. the 5 year average of 20%. January Rice finished unchanged at 14.845, 0.015 off the high and equal to the low.

Soybeans, Grains Rise as U.S., European Economic Concerns Ease (Bloomberg)
Soybeans rose the most in three weeks and grains advanced on optimism that the U.S. will avoid the so-called fiscal cliff as Europe took steps to resolve a Greek rescue, bolstering prospects for commodity demand. President Barack Obama said yesterday he’s “confident” about reaching an budget agreement with lawmakers to avoid $607 billion in automatic tax increases and spending cuts. European finance officials met in Paris today to try to forge a common position to aid Greece. “The perception is that the U.S. and European governments will avoid a financial crisis, and that is bringing in some new investor buying,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “There are signs of end-users increasing forward purchases to lock in lower prices.”
Soybean futures for January delivery rose 0.8 percent to close at $13.9475 a bushel at 2 p.m. on the Chicago Board of Trade, the biggest gain for a most-active contract since Oct. 24. The oilseed has dropped 22 percent from a record $17.89 on Sept. 4 as rain improved crop prospects in Brazil, the world’s second-biggest exporter, and the U.S. U.S. exporters sold 20,000 metric tons of soybean oil to an unknown buyer, the government said today. Corn futures for March delivery climbed 1.6 percent to $7.425 a bushel. The price has declined 13 percent from a record $8.49 on Aug. 10. Wheat futures for March delivery gained 0.5 percent to $8.5775 a bushel. The price fell in the previous six sessions, the longest slump since September 2011. The U.S. was the top exporter of the three commodities last year. Corn is the nation’s biggest crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show. Wheat is the fourth-largest at $14.4 billion, behind hay.

Gas Futures Fluctuate on Outlook for Moderating Weather (Bloomberg)
Natural gas futures dropped in New York for the second time in three days on forecasts for warmer- than-normal weather that would cut heating-fuel consumption. Gas dropped 1.9 percent after MDA Weather Services in Gaithersburg, Maryland, said temperatures may be above normal across most of the contiguous U.S. states through Nov. 23, with normal weather the following week. Heating demand in the U.S. may be 35 percent lower than usual on Nov. 22, data from Weather Derivatives in Belton, Missouri, show. “We’re probably going to get warmer weather down the road, and that’s keeping a lid on prices,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “Futures are still holding up pretty well at these levels, though.”
Natural gas for December delivery fell 7.1 cents to settle at $3.719 per million British thermal units on the New York Mercantile Exchange. The futures are up 12 percent from a year ago. Prices advanced to $3.835 per million Btu in electronic trading, the highest intraday price since Nov. 4, 2011. December $4 calls were the most active gas options in electronic trading. They were 1.3 cents lower at 1.2 cents on volume of 652 contracts as of 2:43 p.m. Calls accounted for 60 percent of options volume. Prices have failed to settle above the 62 percent Fibonacci retracement level of $3.806, Stephen Schork, president of Schork Group Inc. in Villanova, Pennsylvania, said in a note to clients today. Fibonacci analysis is based on the theory that prices tend to drop or climb by certain percentages after reaching a high or low.

Oil Rises to One-Month High on Middle East Conflict (Bloomberg)
Oil rose to a one-month high amid concern that Middle East unrest will disrupt supply and on growing confidence that a deal can be reached to avoid automatic U.S. spending cuts and tax increases. Prices advanced for a second day as Israeli ground forces were poised to invade the Gaza Strip for the first time in almost four years if cease-fire efforts fail. President Barack Obama is “confident” of an agreement to avert the so-called fiscal cliff, he said in Bangkok yesterday. “The war drum is beating in the Middle East and that almost always tends to push up oil prices,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There are reasons for optimism that the leaders will work something out to solve the fiscal cliff.” Crude for January delivery rose $2.36, or 2.7 percent, to $89.28 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 19. Futures are up 3.5 percent this month.
Brent for January settlement gained $2.75, or 2.5 percent, to $111.70 a barrel on the ICE Futures Europe exchange in London. Israel has massed tanks on its border east of Gaza and began to call up 75,000 reservists for a possible ground operation, the first invasion of Gaza since an assault that began in December 2008 and left more than 1,100 Palestinians and 12 Israelis dead.

Oil Trades Near Month’s High as Israel Unrest Threatens Supplies (Bloomberg)
Oil traded near the highest price in a month in New York on concern that Middle East unrest will disrupt supplies, countering speculation that stockpiles rose a third week in the U.S. Futures were little changed after climbing 2.7 percent yesterday as Israeli ground forces honed preparations to enter the Gaza Strip for the first time in almost four years. In the U.S., the world’s biggest crude user, inventories climbed by 1 million barrels last week, according to a Bloomberg News survey of analysts before an Energy Department report tomorrow. “The situation in the Middle East came at a time when there was a risk-on move in the markets, and that fed through into oil,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “At this stage, the fact is that inventory levels and supply capacity are large.”
Crude for January delivery was at $88.94 a barrel, down 34 cents in electronic trading on the New York Mercantile Exchange at 11:47 a.m. Sydney time. The contract increased $2.36 to $89.28 yesterday, the highest close since Oct. 19. Prices are down 10 percent this year. Brent for January settlement rose $2.75, or 2.5 percent, to $111.70 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $22.42 to West Texas Intermediate.

Soros Buying Gold as Record Prices Seen on Stimulus: Commodities (Bloomberg)
Gold’s 12-year rally, the longest in at least nine decades, is poised to continue in 2013 as central bank stimulus spurs investors from John Paulson to George Soros to accumulate the highest combined bullion holdings ever. The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 12 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.62 billion bet through the SPDR Gold Trust (GLD), the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show.
Central banks from Europe to China are pledging more steps to boost growth, raising concern about inflation and currency devaluation. Investors bought 247 metric tons through ETPs this year, exceeding annual U.S. mine output. While both sides said talks Nov. 16 between President Barack Obama and Congress over the so-called fiscal cliff were “constructive,” the Congressional Budget Office has warned the U.S. risks a recession if spending cuts and tax rises aren’t resolved. “We see gold as a hedge against the follies of politicians,” said Michael Mullaney, who helps manage $9.5 billion of assets as chief investment officer at Fiduciary Trust in Boston. “It’s a good time to garner some protection in portfolios by having some real asset like gold.”

Silver Market Recap Report (CME)
The silver market exploded to the highest price level since October 18th today on the back of a dramatic shift in overall market sentiment. In addition to improved US economic data, silver was supported by favorable currency market action, sharply higher equities and gains in a long list of physical commodity markets. With the sharp range up extension in silver prices, it is possible that some of the buying today was technically related buying. In the end, silver simply caught a lift from broad based commodity fund buying interest.

Gold Market Recap Report (CME)
The bulls might have hoped for flight to quality support in gold from the ongoing tension in the Middle East but instead the gold market seemed to be benefiting from a shift toward a risk on vibe. In addition to supportive currency market action, gold also seemed to catch a lift from a broad based physical commodity buying wave. Even the fiscal cliff issue was spun into a positive today, as gold and other commodities rallied off ideas that US leaders were going to attempt to resolve US budget woes prior to the end of the year. However, significant negotiations are still ahead on the fiscal cliff issues and therefore traders should be aware of sudden sentiment shifts ahead. In the action today, gold appeared to be a physical commodity market facing positive macro economic conditions.

20121120 0938 Soy Oil & Palm Oil Related News.

ITS CPO export down 3.3% to 1,023,517 tonnes for the period of 1~20 Nov 2012.

Soybean Complex Market Recap (CME)
January Soybeans finished up 11 1/2 at 1394 3/4, 8 off the high and 9 1/4 up from the low. March Soybeans closed up 14 at 1382. This was 12 up from the low and 7 off the high. December Soymeal closed unchanged at 424.6. This was 1.2 up from the low and 5.9 off the high. December Soybean Oil finished up 0.84 at 47.89, 0.21 off the high and 1.05 up from the low. January soybeans traded higher on the day after some suggested the complex was oversold in the short term and the sharp recovery in the US Stock market seemed to help trigger a round of short covering. The US Dollar traded lower on the day which added to the upside momentum. Soybean meal saw modest gains and oil led the complex higher as speculators covered short positions and following news that US exporters sold 20,000 tonnes of US soybean oil to an unknown destination for the 2012/13 crop year. Gains were limited due to favorable weather conditions in South America over the next two weeks however the strong pace of US export shipments continues to add underlying buying support. Export inspections for the week ending November 15th were reported at an explosive 62 million bushels vs. 64 million last week. Soybean shipments are exceeding the pace needed to reach this crop years USDA estimate by 47.2 million bushels. The cumulative inspection pace is averaging 45% of the current USDA export estimate vs. the 5 year average of 26%. The data is supportive to soybeans long term but some traders believe Chinese demand may be deteriorating after they reportedly canceled cargos last week.

China to halt regular state soy sales from this week –CNGOIC (Reuters)
China, the world's top soy buyer, will temporarily halt regular state soy sales from this week as Beijing starts a stockpiling programme for the oilseed, an official think tank said on Monday, to improve margins for soy plants and spur imports.

EDIBLES: Malaysian palm oil futures rose to their highest in two weeks tracking climbs in soybeans and rival soybean oil, although caution ahead of export data later in the day kept gains in check. (Reuters)